Select Committee on Transport, Local Government and the Regions Appendices to the Minutes of Evidence

Memorandum by State Aid Unit, Scottish Executive (ERF 27)

  The Scottish GRO scheme seems to have been viewed as innovative and favourable comments were made at a recent State Aid and Regeneration Conference in London organised by DTLR.

  Hopefully the following answers to your questions will be helpful.

Does it apply across Scotland or is it limited to the assisted areas?

  The scheme is not limited to assisted areas. It is however targeted for particular areas—single tenure housing estates, older urban neighbourhoods and pressured market areas. Communities Scotland (formerly Scottish Homes) decides which areas are appropriate for support.

Are there any aid intensity ceilings and if not how is the maximum grant calculated?

  The following ceilings apply according to the approval letter:

    "Grants cannot exceed 40 per cent of project cost in designated Social Inclusion Partnerships and Smaller Urban Renewal Initiatives. In all other areas the grant will not exceed 33 per cent. The average level of aid is expected to amount to approximately 23 per cent of project costs."

Is the grant for all owner occupation, owner occupied affordable housing (eg key worker housing) and/or social housing for rent?

  The scheme is specifically for owner occupation, and not social housing for rent. It aims to provide affordable housing for designated client groups—primarily local residents living in rented accommodation through lack of affordable housing in the local area. After a fixed time any houses not sold to these priority groups will be offered for sale on the open market. Key workers are not a specific target for the scheme.

Can the grant take account of abnormal costs eg site remediation or can it only take account of reductions in value as a result of social end use?

  All valuations of land or property will be undertaken by an independent Chartered Surveyor, and the grants will fund the difference between the cost of producing the property and its market value, according to these independent valuations. This could therefore take into account the costs of site preparation such as remediation, decontamination and demolition.

  (The approval letter does not go into any detail on exactly what the eligible costs are—only that valuations must be determined by a Chartered Surveyor. The notification to the Committee does detail eligible costs, and includes the costs of site preparation/remediation etc).

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